Shadow of a Drought

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Ever since indoor plumbing displaced backyard pumps, New York City residents haven’t had to worry about running water. But that changed on July 1, when new regulations gave the city Department of Environmental Protection authority to shut off the flow to buildings with outstanding water bills.

The city’s new get-tough approach is driven by the large number of delinquent customers: between 20 and 25 percent, compared with less than 5 percent in cities that have shut-off policies.

The main intent of the new regulations, say executives of the city Water Board, is to target commercial properties, particularly high-use operators like laundromats. But while the DEP says that it does not intend to go after residential buildings, the regulations explicitly allow it–even spelling out deadlines for shutting off the taps for apartment buildings and single-family homes.

That has housing advocates worried. Although the regulations require residents of a building facing water shut-off to be notified and to have the opportunity to pay outstanding bills themselves, tenant and owner groups say that’s not enough. “Why should the landlords do anything if the tenants are going to be responsible [for the bills]?” says Brian Horner, an organizer for the New York State Tenants and Neighbors Coalition. The end result, advocates fear, could be tenants paying the price for landlords who shirk their bills.

Already, 123 low-income co-ops are more than three years overdue, making them liable for shut-off under the new regulations. One reason for the arrears is that escalating water rates have hit low-income housing hard. In some co-ops and rentals, water charges account for between 7 and 15 percent of annual costs, says John McCarthy, executive vice president of the Community Preservation Corporation, which secures financing for affordable housing. The bite will only get worse: by 2010, it’s anticipated, rates will be more than five times higher than they were in 1986.

The spiraling rates and shut-off policy are signs that the city’s own bills are mounting. The water system’s yearly budget has ballooned to $1.4 billion, up from less than $400 million 15 years ago. “The big drivers in expenses are the capital programs driven by federal and state mandates under the Clean Water Act and the Safe Drinking Water Act,” says William Kusterbeck, treasurer for the New York City Water Board. In the next 10 years, the city will have to spend $8.5 billion on major water infrastructure projects, including sewage treatment plant upgrades and filtration of the Croton Reservoir system. In this squeeze, outstanding bills are an attractive source of revenue.

When these staggering costs get passed down through metered water billing, which the city imposed in 1992, they become in effect a “hyper-regressive tax” that hits the poor hardest, says Anthony J. Blackburn, an economic consultant who has prepared reports on New York City’s water for environmental groups as well as the DEP. In general, Blackburn has found that when metering is phased in, “many higher-income buildings’ water bills will increase below average or even decline, while for low-income buildings, water bills will rise.” Low-income housing tends to use more water because household sizes are typically larger, and older plumbing is more likely to leak.

The full impact of metering has yet to be felt because low-income buildings have benefited from special transition programs provided by the city, under which some are still paying flat rates. So far, those breaks have been extended annually under steady activist pressure. But their future is now under discussion at DEP, and a state rule prohibits the city from simply extending discounts to buildings that need them.

Even with the rising rates, Kusterbeck insists that the shut-off regulations are necessary. “People look around at other things that they have: electric, cable, telephone, and if they don’t pay them it gets shut off,” he says. “So what doesn’t get paid? Water!”

Meanwhile, housing advocates hold out hope that the city won’t risk cutting off water to homes. “I expect that they would probably not do this,” ventures McCarthy. “The PR backlash would be tremendous.” That leaves the city with the challenge of collecting unpaid water bills without tormenting tenants–and the need to find some way of making water affordable.

Alex Ulam is a Manhattan-based freelance writer.